Following The Leader Off The Cliff

Apr. 13, 2009

It's beyond lame, now . . . the automatic, reflexive response by Virginia's liberals that not only do we need more taxes but that we can afford them. Regarding the former, it's that the "government doesn't have enough money," as if the people it is sucking it from does. That's the problem we're facing now, right? People have less money. Too bad. Government elites want whatever it is you have left.
Regarding the latter, whether it's Senate Majority Leader Dick Saslaw (D-35, Springfield) pitching higher gas taxes or now Governor Tim Kaine pleading for higher unemployment insurance taxes on businesses, it's always something about Virginia's taxes aren't as high as a neighboring state's or the national average or states that begin with letters never chosen in the final round on Wheel of Fortune, therefore we can afford them. As if the fact that Virginia may happen to have a particular tax lower than North Carolina, Maryland or Utah makes a difference as to whether it's justifiable on the merits to raise it .

The latest in this nonsense is the aforementioned tax on businesses that funds unemployment insurance for laid-off workers. Last week, during its veto session, the General Assembly rejected the governor's attempt to accept federal "stimulus" money for extended unemployment insurance payments. The main argument against accepting the money was that, after the two year federal funding period, Virginia would have been obligated to continue the expenditures at a level necessitating a large tax increase on the people that create the jobs to begin with — businesses, including small businesses (often family owned) which create most jobs.

According to Governor Kaine, as reported in yesterday's Richmond Times-Dispatch, "Virginia employers pays the second lowest annual amount of unemployment taxes in the nation." By that logic, let's raise every tax in Virginia in which we are in the bottom 10 percentile. Or 20 percentile . . . or heck, make it the 50 percentile. Don't want to feel too fortunate, here, do we?

In effect, they're saying let's give up our advantage in order to tax more people because other states are doing it. But isn't the idea to create an economic environment to recruit new business to Virginia and to encourage start-ups? But these liberals are saying, "We're not taxing our residents enough. If other states can do it, so can we!" Worse, they believe it!

Turns out though, Virginia isn't such a low tax state after all, the perception perhaps perpetuated as a ready excuse to raise taxes (we're under taxed, so ante up more). According to Scott Hodge of the nonpartisan Tax Foundation, Virginia's overall tax burden is one of the nation's worst, rivaling notoriously high-taxing New York, New Jersey, California and, even, "Taxachussetts." (So much for our low-tax advantage.) Hodges spoke recently on Freedom & Prosperity Radio and you can hear the interview here with other interesting statistics.

Either way — whether they believe there is "room" to raise taxes compared to other states or they selectively pick and choose taxes that are lower here by comparison in order to raise a sense that an increase won't hurt — Virginia's tax-and-spenders insist on following other states rather than leading. Never mind that it's following them right off the economic cliff.